The Federal Government’s (FG) bond offer and allotment increased by ₦1.99 trillion in the first six months of 2021 to ₦13.66 trillion, from the ₦11.67 trillion recorded in the corresponding period of 2020.
The Financial Markets Department of the Central Bank of Nigeria (CBN) disclosed this in its half-year activity report for 2021.
The department attributed the rise to the government’s drive to fund fiscal deficit from the domestic market.
The report stated that “In the review period, Federal Government of Nigeria (FGN) bonds worth ₦900 billion was offered, while public subscription and sale stood at ₦1.73 trillion and ₦1.42 trillion, respectively. The amount offered comprised new issues and re-openings of FGN bonds.
“In the corresponding period of 2020, FGN bonds issue, subscription and allotment were ₦615 billion, ₦2.45 trillion and ₦1.31 trillion, respectively. The increase in offer and allotment in the first half of 2021 was attributable to the government’s drive to fund fiscal deficit from the domestic market.
Consequently, the total value of FGN bonds outstanding at end-June 2021 stood at ₦13.66 trillion, compared with ₦11.67 trillion at end-June 2020, indicating an increase of ₦1.99 trillion or 17.01 per cent.”
The report stated that in the first half of 2021, there was no new issue of the Federal Republic of Nigeria Treasury Bonds.
Consequently, it added, the outstanding stock stood at ₦100.99 billion, the same as at end-June 2020.
A breakdown of the outstanding showed that the CBN held ₦18.01 billion, while ₦82.98 billion was held in the sinking fund.
2020
In the corresponding period of 2020, it added, the CBN held ₦27.99 billion, while ₦73 billion was held in the sinking fund.
The report stated that during the first six months of 2020, “the total NTBs issued and allotted was ₦1.6 trillion apiece, indicating an increase of ₦149.94 billion or 9.89 per cent above ₦1.52 trillion issued and allotted apiece, in the corresponding period of 2020.
“Total public subscriptions stood at ₦3.1 trillion, compared with N2.9tn in the corresponding period of 2020.
“The increase in public subscription was attributed to the increased yield on NTBs, which was market-driven amidst investors’ demand for higher yields.”
It added that the holding structure of the instrument indicated that Deposit Money Banks took up ₦1.25 trillion or 75.31 per cent, while mandate and internal funds customers, including CBN branches, accounted for the balance of ₦411.22 billion or 24.69 per cent.
